1099 misc from Carmax

[judyp07]

I  sold a business car to Carmax so will receive a 1099 misc.  I entered the car sale info into Business Deductions and Credits, Sales of Business Assets in TT.  I entered sales price, tax basis and depreciation.  TT then told me that this sale results in a loss so no need to report it and that they will delete from TT.  But I have a 1099 misc from Carmax that the IRS will get.  Where do I enter the 1099 MIsc in TT? 

[rjs]

"will receive a 1099 misc"
"I have a 1099 misc"

Did you already receive the 1099-MISC, or are you expecting to receive it? In your other question about selling the car you said that you sold it in 2020, so I would not expect the 1099-MISC to be issued until January. They are not supposed to issue a 1099-MISC for the sale of an asset, so maybe you are not going to get one.

If you already received a 1099-MISC, which box is the sale price in?

Do you report your business on Schedule C, or on a different form?

Please do not post any more separate questions about the sale of your car. As you can see, it's helpful to have all the relevant information in one place. It's hard to follow, and hard to see the whole picture, if the information is scattered in multiple threads. If you want to add more information, or you have another question related to the sale of your car, add a reply to this question.

[Opus 17]

Please clarify.  "I  sold a business car to Carmax".  In your other post you said it was a personal vehicle partly used for business.

Most of the time, when you use a personal vehicle partly for business, and sell it used, you have a non-deductible loss, even when taking into account the depreciation that you claimed as a car expense (if you used the standard mileage method, that includes depreciation). 

If you receive a 1099-MISC from the buyer, the sales proceeds are non-taxable.  You can deal with this in one of two ways.

1. Add the 1099-MISC as income to your tax return (personal, not business income). Then go to the other uncommon income section and create an item of income with a negative amount to offset the 1099.  Call it "adjustment for non-taxable 1099" or something similar.  The IRS may send you a letter asking for an explanation so save all your records for at least 3 years.

2. Don't include the 1099.  Print your return and file by mail.  Attach a copy of the 1099 and a letter of explanation why it is not taxable.  Don't send complicated proof, just a simple letter of explanation and the IRS will ask for proof if they want it.  Save copies of your proof for at least 3 years in case the IRS asks.  You can't e-file using this method. 

If the Business owned the vehicle, you handle this differently.  The 1099-MISC may be income to the business, depending on how and how much you depreciated the car when you placed it in service with the business.  You will need to provide more details. 

[judyp07]

Thank-you.  In previous years  I was a sole proprietor filing a Schedule C.  I did use my personal car partially for business and used the standardized mileage rate.   I just sold this car to Carmax.   

Thanks for your input!

[AmeliesUncle]

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@judyp07 wrote:

TT then told me that this sale results in a loss so no need to report it and that they will delete from TT.  

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No, it did not say that.  It said it can not report it as you were indicating.  Go back through that section and read the questions REALLY carefully.  If it was a loss, you need to answer the questions and check the box that it was a loss, rather than a gain.

As was mentioned, if the vehicle was partially personal use, you need to MANUALLY calculate and enter the business portion because TurboTax is not set up for that.  It can be complicated, so you may consider going to a tax professional this year.